for Nonprofit Excellence

1 1 Principles & Practicesfor Nonprofit ExcellenceA guide for Nonprofit staff and board membersA guide for Nonprofit staff and board membersThe Minnesota Council of Nonprofits (MCN) is a statewide association of more than 2,000 Minnesota Nonprofit organizations. Through its website, publications, workshops and events, cost-saving programs and advocacy, MCN works to inform, promote, connect and strengthen individual nonprofits and the Nonprofit 2014 by the Minnesota Council of Nonprofits. All rights reserved. No part of this publi-cation may be reproduced or transmitted in any form or by means electronic or mechanical without the written consent of the Minnesota Council of & Practicesfor Nonprofit Excellence2 IntroductionIN 1994 THE MINNESOTA COUNCIL OF NONPROFITS (MCN) became the first state association of nonprofits to develop a set of accountability principles and management practices.

2 This revised edition completely up-dates those original standards while remaining true to MCN s longstanding goal of open access to our comprehensive policies for strong public account-ability. The Principles and Practices for Nonprofit Excellence are based on the fun-damental values of quality, responsibility and accountability. The 11 accountability principles distinguish the Nonprofit sector from government and the business sector. The 192 management practices provide specific guidelines for individual organizations to evaluate and improve their opera-tions, governance, human resources, advocacy, financial management and fundraising. This document has three intended purposes. The first is to provide indi-vidual organizations striving for Excellence with a tool for strategic planning and operational evaluation relative to the rest of the Nonprofit sector.

3 The second is to support the growth and quality of the sector. The third is to increase public understanding of the role and contributions of the Nonprofit sector. The Principles and Practices for Nonprofit Excellence are not meant for use by funders or government to evaluate Nonprofit organizations, nor are they intended as a substitute for the wisdom of directors or trustees of individual organizations. Given some blurring of the lines between the three sectors of the economy, this document is designed to support the effective functioning of our sector by recommending specific best practices. This revised edition of the Principles and Practices for Nonprofit Excellence was developed by a 37-member committee representing the diversity of Minnesota s Nonprofit community.

4 A complete list of members can be found on page Nonprofit organization needs a strong foundation of compliance and a broad organizational awareness of laws and regulations related to fundrais-ing, licensing, financial accountability, human resources, lobbying, politi-cal advocacy and taxation. The Principles and Practices presume that each organization is in compliance with applicable laws, including Minnesota Chapter 317A (the Minnesota Nonprofit Corporation Act); relevant sections of the Internal Revenue Code; and other federal and state laws dealing with employment, occupational health and safety, and and Practices for Nonprofit Excellence Minnesotans join together throughout the state to form associations and organizations of every type. The Principles and Practices for Nonprofit Excellence are of particular interest to 501(c)(3) organizations.

5 However, the information and concepts apply broadly to all types of Nonprofit orga-nizations. Because of the sector s diversity by size, region and activity area, each organization must determine whether or not an individual practice is appropriate for its current organizations have proven essential to the vitality of communi-ties. They enrich quality of life, epitomize the highest societal values and strengthen democracy. Volunteers, board members and employees become involved with a Nonprofit because of the organization s public benefit mis-sion. Therefore the continued success of Minnesota s Nonprofit organiza-tions requires broad public support and confidence. This document publicly testifies the Nonprofit sector s commitment to Excellence always for the benefit of critical role of nonprofits in democratic societies underscores the im-portance of knowing how to form, govern and manage these organizations.

6 The growth and progress of the Nonprofit sector depends on developing and improving this body of knowledge. Since its founding by Minnesota s nonprofits, MCN has provided research, education and technical assistance to strengthen Nonprofit management and governance. The Principles and Practices form an ongoing framework for MCN s trainings, publications and other educational materials. MCN s website also provides access to templates, samples and techniques to help organizations easily and cost-effectively implement the Principles and to Readers: Please be aware that certain words have particular meanings in this document: Must is used to describe practices required by state or federal law,and is noted with this symbol ; the online version of the Principles and Practices (located at ) will soon include direct web links to relevant federal and state statutes and reporting forms.

7 Should is used to describe highly recommended practices. Constituents describes people with a stake in the success of the organization and may include members, neighbors, clients, volunteers and Updated History of the Principles and PracticesTHE MINNESOTA COUNCIL OF NONPROFITS BEGAN THIS DOCU-MENT on Nonprofit accountability at its 1993 Annual Conference. We continued to develop it through community meetings, workshops and dis-cussions throughout the state. Under the leadership of Dr. James P. Shannon and James V. Toscano, MCN joined with two organizations the Charities Review Council of Minnesota and MAP for Nonprofits to convene discus-sions on Nonprofit standards and to develop principles of sound Nonprofit management and accountability. The first draft of the Principles and Prac-tices for Nonprofit Excellence was circulated to Nonprofit and philanthropic leaders throughout Minnesota and the United States in 1994 and was ap-proved by MCN s board of directors in 2005, MCN conducted a major revision of the Principles and Practices, led by James V.

8 Toscano. In 2013, MCN gathered a new group of Nonprofit leaders through the Principles and Practices Advisory Committee to review necessary changes. James V. Toscano returned as a co-chair of the commit-tee joined by Rinal Ray and Armando Camacho, with Laura Johansson as facilitator. The new draft incorporated input from these Nonprofit leaders from across the state, who are listed on the following the past ten years, a growing number of associations of Nonprofit organizations throughout the United States have used MCN s Principles and Practices for Nonprofit Excellence as the basis for similar documents in their states. MCN has been pleased to give permission to adapt the Prin-ciples and Practices for Nonprofit Excellence to statewide organizations, including: Arkansas Coalition for Excellence Colorado Nonprofit Association Connecticut Association of Nonprofits Kentucky Nonprofit Leadership Maine Association of Nonprofits Michigan Nonprofit Association Mississippi Center for Nonprofits Nonprofit Association of the Midlands (Nebraska) North Carolina Center for Nonprofits South Carolina Association of Nonprofit Organizations Texas Association of Nonprofit Organizations Center for Community Based and Nonprofit Organizations (Texas)MCN will cooperate with these associations and others to develop and share educational tools and resources to strengthen the accountability and effectiveness of nonprofits Armando Camacho, Opportunity Partners (co-chair)

9 , Minnetonka Rinal Ray, formerly with Minnesota Justice Foundation (co-chair), Minneapolis James V. Toscano, Toscano Advisors, LLC (co-chair), Saint Paul Judy Alnes, MAP for Nonprofits, Saint Paul Shannon Benolken, formerly with Itasca County Habitat for Humanity, Grand Rapids Kerrie Blevins, The Patrick and Aimee Butler Family Foundation, Saint Paul Susie Brown, Minnesota Council of Nonprofits, Saint Paul David Brown, CBIZ, Saint Paul Shelly Chamberlain, Minnesota Council of Nonprofits, Saint Paul Bobbi Cordano, Amherst H. Wilder Foundation, Saint Paul Christine Durand, Minnesota Environmental Partnership, Saint Paul Amel Gorani, Consultant, Northfield Phil Hansen, American Red Cross Twin Cities Area Chapter, Minneapolis Mary Jones, YWCA of Minneapolis, Minneapolis Jason Kujanen, formerly with MACC CommonWealth, Minneapolis Jeff Larson, Mille Lacs Band of Ojibwe Health and Human Services, Onamia Anne Long, Plymouth Christian Youth Center, Minneapolis Paul Masiarchin, Minnesota Council of Nonprofits, Saint Paul Sonja Merrild, Blandin Foundation, Grand Rapids Heidi Neff Christianson, Nilan Johnson Lewis, Minneapolis Katie Nelsen, Animal Humane Society, Golden Valley Janet Ogden-Brackett, Nonprofits Assistance Fund, Minneapolis Jon Pratt, Minnesota Council of Nonprofits.

10 Saint Paul Sondra Reis, Minnesota Council of Nonprofits, Saint Paul Robert Routhieaux, Hamline University School of Business, Saint Paul Patrick Rowan, Metro Meals on Wheels, Inc., Minneapolis Jenna Salinas, Charities Review Council, Saint Paul Lori Saroya, Council on American - Islamic Relations, Minnesota, Minneapolis Tim Schmutzer, Pine Habilitation and Supported Employment, Sandstone Rich Smith, Family Pathways, Cambridge Sheila Smith, Minnesota Citizens for the Arts, Saint Paul Linda Tacke, Carl and Eloise Pohlad Family Foundation, Minneapolis Paul Vliem, Minnesota Council of Nonprofits, Saint Paul Melinda Wedzina, Feeding Our Communities Partners, Mankato John Wurm, Minnesota Council of Nonprofits, Saint Paul Reid Zimmerman, RA Zimmerman Consulting, Pine CityMCN s board of directors approved this revision of Principles and Practices for Nonprofit Excellence on May 20.